Portions of the financial statements for Parnell Company are provided below. PARNELL COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 000s) Revenues and gains: Sales $ 790 Gain on sale of buildings 10 $ 800
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Question “Portions of the financial statements for Parnell Company are provided below. PARNELL COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 000s) Revenues and gains: Sales $ 790 Gain on sale of buildings 10 $ 800”
Portions of the financial statements for Parnell Company are provided below.
PARNELL COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues and gains:
Sales
$
790
Gain on sale of buildings
10
$
800
Expenses and loss:
Cost of goods sold
$
295
Salaries
119
Insurance
39
Depreciation
122
Interest expense
49
Loss on sale of machinery
12
636
Income before tax
164
Income tax expense
82
Net income
$
82
PARNELL COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s)
Year
2018
2017
Change
Cash
$
133
$
101
$
32
Accounts receivable
323
217
106
Inventory
322
424
(102
)
Prepaid insurance
67
87
(20
)
Accounts payable
209
118
91
Salaries payable
104
94
10
Deferred income tax liability
62
53
9
Bond discount
188
201
(13
)
Required:
1. Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the direct method. 2. Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the indirect method.
REQUIREMENT 1:
REQUIREMENT 2:
Answer
The direct method produces the following statement of cash flows for Parnell Company. 790 SALES – INCREASE IN ACCOUNT REC.106 cogs – Desrease in inventory and increase in account payable Cash paid to suppliers $102.00
Parnell Company’s statement of cash flows using the indirect method. Cash Flows From Operating Activities: Net Income $82.00 Adjustments: Gain on Sale of Buildings $122.00 $12.00 Changes in operating assets and liabilities Decreased inventory Increased accounts payable Increased salaries payable Decreased deferred income tax liability Increased bond discount -$106.00 $102.00 $19.00 $20.00 $9.00 $13.00
Conclusion
Above is the solution for “Portions of the financial statements for Parnell Company are provided below. PARNELL COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 000s) Revenues and gains: Sales $ 790 Gain on sale of buildings 10 $ 800“. We hope that you find a good answer and gain the knowledge about this topic of null.
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-Revenues-and-gains:-Sales-$-790-Gain-on-sale-of-buildings-10-$-800.png?x-oss-process=image/resize,w_560/format,webp)
